U r b a n T r e k k e r

Green Thursday: Energy Evaluation

This is something that I've been thinking about for awhile: Green Thursday. So from now on, every Thursday, I will bring you green related news. Starting with this post. - dewita

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In Canada, residents can apply for grants to retrofit their homes to be more energy-efficient. There they call it energy evaluation. Over here, we call it 'energy audit.' What is in a name? In the U.S., we also offers the same type of program like they do in Canada. 'Weatherization assistance program' is a program for the neediest citizens that runs via Department of Energy. 

The DOE last year allocated just $227.2 million for the Weatherization Program, which was founded in 1976 and has so far helped around 6.2 million families' homes become more energy-efficient by upgrading insulation, heating and cooling systems, air filters, and windows.[via BusinessWeek]

President Obama's Stimulus package provides $5 billion to improve energy efficiency of more than 1 million homes through weatherization (which is 25x 2008 budget!). The program will help save $350 per year on heating and air-conditioning bills.

For others who have the means, you can hire professional energy auditors to help evaluate and analyze how you consume energy at home. It may cost some money, but it's worth it. Because this is the low hanging fruit.

How Many Pre-Approvals Do You 'Actually' Need Before Buying Foreclosure?

IN the foreclosure world, banks that owned the properties 'required' potential buyers to go through their lenders, hoping to keep the business in-house. Notable banks using this tactic: Wells Fargo and Countrywide. Interestingly Bank of America (parent of Countrywide) is not using this tactic. Or, (maybe) not yet..

"What if it takes you 5 or 6 contracts before you actually secured a house, since competition for buyers is fierce in the foreclosure world?" You're getting antsy because you have to go through their so called 'S-O-P' every single time -if your lender is other than their 'preferred' lender.

Since your intention is to bid on that property, you may have to follow whatever they required you to do, which is very very unfortunate..

Part of the ritual in this foreclosure world is, I would ask the listing agent the "what-if" scenario before submitting a contract, especially if the client have already been pre-approved by other bank. And the listing agents 'always' sing the same song..

"I need a Wells Fargo pre-approval before my client will even look at your offer!"

or this,

"I'll still need a pre-approval letter from Countrywide."

Of course, they represent the sellers. So, they do what the sellers 'wanted' them to do.

By the way, you are under 'No-Obligation' to do business with the foreclosure lender. Just be ready. Because occasionally you run into loan guy, who can be 'very aggressive,' in chasing your business. Like this case: a client recently got accepted as participant to Prince William county Home Help program, a program for county employees to receive home buying assistance from the county. The letter from the County clearly says that "Home Help Participants will be required to provide SunTrust Mortgage this Award Letter... blah blah blah.." (emphasis added)

Even after my client tells the CW guy of her getting county's assistance, she still got to hear "his rap."

Dewita,

I called the individual from Countrywide and he was going on about how I should consider going with them. I can't receive the downpayment assistance with the County and still go with Countrywide to receive their incentives? I am confused. He said I may be entititled to about $4,000 in incentives. He was enroute to Fairfax and said someone will be in touch with me regarding the preapproval letter. His biggest incentive was $3,000 towards closing costs. Free appraisal and Title insurance for $100.00 . What are your thoughts?

I understand where they're coming from, they wanted to make sure that there won't be interruptions to closing.  But, trying to go after business that have 'secured' County's backing, it just doesn't sound right. (The truth is: County would contribute up to $5,000).

Hmm, I wonder if they've ever learned anything from the past (here and here)?

On the Trenches

I've been actively working on the trenches these couple of weeks. Haven't had a decent time to just sit down and do the thing I love: blogging. I'll be out again working the trenches today. This time, we'll go inside the Beltway, specifically Arlington-Falls Church corridor. We'll be checking out foreclosure and short sale properties. And there are not too many of those anymore..

A quick observation. Think we're at the point where we've seen that foreclosure inventories are going away. We've seen less and less properties for sale in hoods that previously had a high level of foreclosures! Like here, here and here. Buyers snap properties left and right. Case in point. We're at a (relatively new) stack townhouse/condo the other day in - of all places Gainesville - and this morning when I'm about to submit the offer from my client (this is day 3 property on the market) to the listing agent. This is the email I got back from the agent.

"We have multiple offers on the property, the bank is not accepting any more."
Thank you,

OK. Moving on. I'll be blogging from the trenches via Twitter, where you can follow me there. Will be back on regular programming (hopefully) soon..

From Mental Hospital to DHS HQ

Department of Homeland Security is about to make the former St. Elizabeth Hospital their home. It's not going to be ready till 2016, though.

Credit Crisis Visualized

[h/t New Medici, Boing Boing.]

Competition is Fierce in Foreclosure Land..

This is how the competition looks like .."9 offers in already!" Hellooo...

data: MRIS

Jumbo Defaults Rise Fast: Bloomberg

Now the financial crisis has spread out evenly from the poorest to the wealthiest, via Bloomberg.

About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent, a percentage reached within 10 months and the fastest since at least 1992, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Florida. That’s almost twice as quickly as 2007 and a level 2006 owners haven’t attained after almost three years.
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“The biggest influence in rising delinquencies is related squarely to the economy rather than poor underwriting,” said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, New Jersey-based mortgage research firm. “We are apparently all suffering to some degree. It’s certainly more severe for some but still, it’s pretty much widespread.”

It's the economy that caused prime borrowers to be late on payments, "not" the underwriting. While subprime loan defaults is because of 'poor' underwriting primarily. Interesting.

So far we haven't seen too many short sale or foreclosure in pricey hoods around DC region. But, you never know..

Read full story here.

January Sales Trend: Washington DC (the lowest since 2000)

It's not a good month for DC. Unlike Northern Virginia, the number of homes sold in January was the lowest since 2000. The total number of homes sold in '09 was 253  units, a decline of 20% from last year. If we go back to 2005 - at the peak of the market - same month January sales sees a 56% decline in terms of units sold from 584 to 253 units.

Furthermore, the average median sales is off 15.89% from $428,000 to $360,000. On a longer track record, the average median sales actually dips below its '05 price levels. The average sales price also is on declining trend. It's off 11% from $556,511 to $495,380 - which is safe to say that the sales price fall below  its '05 level.

January Homes Sales DC

Publish at Scribd or explore others: Presentations & Slid trends foreclosure

Let's look at the financing part. Conventional financing still rules in DC. It financed about 55% of all home sold while FHA and VA (combined)  financed about 22% and self-financing (or cash) represented 14% of the financing type.

This is big challenge for DC: the high level of home inventory. If you plan to put your home on the market, please think it over. Because inventory of homes in DC has an equivalent of 14.7 months of supply! This is not counting new homes coming on the pipeline. Even with the incentive for first-time buyers (part of Stimulus package), it won't be enough to lift the market. There's simply 'too' many homes on the market in DC than across the river in Northern Virginia. (It's probably more units are on the condo side).

In short: DC still has a long way to go before it hits bottom. Don't be surprised if we see more condo developments converted to rentals.

Obama's Mortgage Refi Plan

Think of the $75 billion lifeline to homeowners that Pres. Obama announced this afternoon a huge refinancing effort from the Feds. The "Homeowner Affordability and Stability Plan" targeted three things:

1. To provide access to low-cost refinancing to "responsible" homeowners who have Fannie or Freddie loans.
2. Keep people who are at risk (with subprime or other exotic loans) in the house through workable loan modifications. 
3. Increase funding commitment to Fannie and Freddie. 

In addition to that, it also includes funding for relocation and assistance to renters displaced by foreclosure and neighborhood stabilization funds. There's more here...
Housing Example Sheet

Publish at Scribd or explore others: Other Manuals mortgage obama

What's In Store on Stimulus Package for First-time Buyers and Homeowners

President Obama signed the American Recovery and Reinvestment Act (ARRA) or stimulus package yesterday. In addition to tax credits, higher mortgage limit and elimination of caps for cost of residential renewable energy systems, the package also includes funds to help low income families to weatherize their homes with energy savings windows, insulation, etc. via Dept. of Energy.   

Here's how the stimulus will benefit home owners and first time buyers:

FIRST-TIME BUYERS

• If you qualify as first-time home buyers you get tax credit of $8,000 if you purchase a home between 1/1/09 to 12/1/09 - which is unlike the $7,500 tax credit that was passed last year - does not need to be repaid as long as 'the buyer lives in the home for at least 3 years.' 3 years is the buy-and-hold period.
• To claim the credit as first-time buyer:  1) have no prior ownership the last 3 years, 2) income limitation $75,000 for single and $150,000 for married taxpayers.
• Tax credit can help offset your tax burden dollar for dollar. For example, if you owe less than $8,000 you'll get a refund for the difference. If you owe more than $8,000 you can use the credit to help wipe out your tax due (up to the same amount).
• The catch: if you bought a home last year and claim the credit, still needs to be paid back over a 15 year timeframe that starts in 2011 when you file your 2010 returns.

MORTGAGE LIMIT

• Limit for FHA Reverse Mortgages (for senior citizens) for home purchase have been increased from $417,000 to $625,000.
• The stimulus plan restored the previous FHA limit of $729,750 for high cost areas (including DC).

HOME IMPROVEMENT TAX CREDIT

• 30% tax credits for energy efficiency improvements up to $1,500.
• Eliminate caps for specific improvements such as windows, furnace and establish cap of $1,500 for all improvements placed in service in 2009 to 2010.
• 30% tax credit of the cost of residential renewable energy systems (solar, geothermal pumps, small wind turbines, and fuel cell system).

For more details here, here, here and here.

image: White House